When you create an APP-ID in the developer.paypal.com center (see under Reviewing applications with Adaptive API calls) you set up which features your applications will use. Some features are considered "basic" and do not require any special permissions adn your app will have a status of "Approved Automatically" if your app needs some special features (such is chained payments) your app will have to got through review process and the status will be "Conditionally Approved" What this means you can use basic features (such as simple adaptive payments) but you cannot use special features, until it is approved. Furthermore when you create an APP ID you have to specify that you will use this feature (granting permissions to third party user) so that APP is enabled to use this feature
Edit: Worth to note that when create the sandbox account your application will have all features enabled and it wil not require any special permissions from Paypal, so don't be fooled by that; because once you go live it will throw an error if your APP-ID is not approved (or rather if it is conditionally approved). Review process can take weeks, so I will advise to plan in advance and not take assumptions that if it works in sandbox environment that it will work in live by default.